Eli Lilly and Company announced last month that it was immediately halting clinical trials of (R)-fluoxetine and terminating its licensing and development agreement with Sepracor Inc. to bring the drug to the market.

Lilly acknowledged that the drug "demonstrated a small but statistically significant increase in QTc prolongation," especially at higher doses. QTc prolongation, a lengthening of a critical period of the heart’s rhythm cycle, can lead to potentially fatal cardiac dysrhythmias.

In a separate announcement, Sepracor said that it believes the QTc prolongation is "a clinically insignificant effect"; however, the company said in a press release that "given the risk and timing of the development of (R)-fluoxetine, and following an assessment of the competitive environment, . . . Sepracor has decided not to pursue the (R)-fluoxetine program at this time."

The new compound, in stage 3 clinical trials for the treatment of major depression, had been a bright spot in Lilly’s pipeline. Lilly had purchased exclusive rights to develop and market (R)-fluoxetine from Sepracor, which developed the chemical cousin of fluoxetine, the active ingredient in Lilly’s Prozac.

The new antidepressant had showed promise in both efficacy and safety. Early data from clinical trials had indicated that the new compound was not only effective, but also appeared as though it produced fewer side effects than the existing fluoxetine product.

With the termination of the agreement, Lilly will return all scientific data on (R)-fluoxetine and all rights to develop and market the compound to Sepracor.

The failure of the new antidepressant is bad news for both companies. Sepracor lost over one-fourth of its market value in stock trading the day after the announcement was made. The company had stood to receive an estimated $100 million in annual royalties from Lilly beginning in 2003.

Lilly, whose sales of Prozac have been declining at the same time it is facing looming competition from generic versions of the popular antidepressant, had hoped to be able to market the new antidepressant as a patent-protected alternative to generic versions of Prozac. Prozac boasted global sales of $2.6 billion in 1999, but Lilly faces expiration of its U.S. patents on the drug in August 2001.